Ford to cut about 10 per cent of its global workforce
Ford plans to cut about 10 per cent of staff worldwide as chief executive officer Mark Fields faces escalating pressure to boost profit and a lagging stock price, the Wall Street Journal reported.
The job cuts are expected to be outlined as early as this week and mostly target salaried employees, the newspaper said, citing unidentified people briefed on the plan. It’s unclear if hourly factory workers are included, the Journal said.
“The company’s performance has been lagging, even during times when the U.S. market was doing extremely well,” said Sascha Gommel, a Frankfurt-based automotive analyst at Commerzbank.
“Ford like other carmakers is under pressure to stem increasing investments in future technologies, so they need to make adjustments elsewhere,” he said, adding that the United States and South America could see the biggest hits.
Ford shareholders last week criticized company leaders over what one investor called the “pathetic” performance of the automaker’s shares and questioned how the board can continue to support Fields, who’s been CEO since July 2014. The board convened ahead of last week’s annual meeting to press him on his plans for improving the company’s fortunes, a person familiar with the discussions said.
“We have not announced any new people efficiency actions, nor do we comment on speculation,” Ford said in an emailed statement.
Fields is facing sharp questioning of his strategy with Ford’s shares having fallen about 36 per cent since he replaced Alan Mulally, who steered the company through the global financial crisis without a government bailout.
Fields has been pouring billions into electric autos, self-driving cars and ridesharing experiments as Ford’s conventional vehicle business has struggled more than crosstown rival General Motors amid a slowing U.S. market.
First-quarter adjusted earnings at Ford fell 42 per cent, while GM has said it remains on track for another record annual profit. Ford has said earnings will rebound in 2018.
Ford employed about 201,000 workers as of the end of last year, including about 101,000 in North America, according to a regulatory filing.